Fair's Fair: Why Congress Should Amend US Antidumping and Countervailing Duty Laws to Prevent "Double Remedies"

This work examines the US Department of Commerce’s (DOC’s) new policy of applying countervailing duty (CVD) law to imports from non-market economies (NMEs). Since 2007, the DOC has applied countervailing duties to several imports from the People’s Republic of China. The DOC has long considered China a NME for the purposes of antidumping (AD) duties. The legality of the DOC’s shift in policy under US law has not yet been directly tested in the US courts. The DOC’s current policy of applying both CVDs and AD duties to products from NMEs with no adjustments to the dumping margin is probably permissible under US law. The strongest argument for finding the policy illegal is that Congress did not intend, in enacting the relevant AD and CVD statutes, to allow the DOC to impose CVDs on NMEs. The stronger argument, however, is that it is unclear what Congress intended. Because the DOC’s interpretation is reasonable, it is a permissible interpretation of the statute. After an analysis of the legality of the policy under US domestic law, this work seeks to assess the validity of the policy under WTO law. The analysis reveals that while the policy may be permissible under US law, it may violate WTO obligations of the US. China has already requested a panel hearing at the WTO to resolve the matter. The case will be heard in early July 2009. For the sake of fairness and to comply with international obligations, this work argues that the Congress should amend US countervailing duty law so that it simply levels the playing field for domestic producers rather than punishing exporters from NMEs.